What is the main purpose of determining a compensation and benefits philosophy?

The main purpose of determining a compensation and benefits philosophy is to achieve organizational goals. This philosophy serves as a guiding framework that aligns compensation strategies with the overall objectives and values of the organization. By establishing a clear compensation and benefits philosophy, an organization can effectively attract, motivate, and retain talent, which directly contributes to its success and strategic objectives.

Additionally, a well-defined philosophy helps ensure consistency and fairness in compensation practices, fostering employee satisfaction and loyalty. It establishes the foundation for how pay is structured and how benefits are offered, ensuring these elements support the organization's mission and help drive performance. This alignment is essential for achieving long-term organizational goals, such as enhancing competitiveness, driving employee engagement, and fostering a positive organizational culture.